The Founders believed that consolidating executive, legislative, and judicial powers would threaten liberty, so to avoid this tragedy, they built our constitutional framework with checks and balances. James Madison, the Father of the Constitution, wrote in Federalist 47 that “The accumulation of all powers, legislative, executive, and judiciary, in the same hands, whether of one, a few, or many, and whether hereditary, self-appointed, or elective, may justly be pronounced the very definition of tyranny.”
The Dodd–Frank Wall Street Reform and Consumer Protection Act created a committee, a study group, and a powerful regulatory agency. (Respectively, the Financial Stability Oversight Council, the Office of Financial Research, and the Consumer Financial Protection Bureau.) The Consumer Financial Protection Bureau (CFPB) has been assigned regulatory authority over more than twenty major laws, and the Dodd-Frank Act press-ganged civil servants from the Federal Reserve, the Federal Trade Commission, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Department of Housing and Urban Development.
- The CFPB feels empowered to collect whatever financial data it judges necessary, including credit card transactions. The US Chamber of Commerce claims the CFPB needs a warrant or National Security Letter to demand account-level data, but the CFPB is proceeding anyway.
- The cost to remodel the CFPB’s new home has soared from $55 million to $145 million—more per square foot than the Trump World Tower, the Bellagio Casino, or the Burj Khalifa in Dubai. Worse, through good planning or bad, one-third of CFPBs employees won’t fit in the lavish digs across from the White House. The CFPB is stonewalling FOIA requests about these overruns from newspapers and political groups.
- Dodd-Frank gave the CFPB subpoena power, but the agency is unhappy with strict adherence to the law and insists that regulatory precedents brush aside the statute of limitations and nondisclosure agreements.
- As if the CFPB didn’t have enough control over the financial sector, the Financial Stability Oversight Council claims that insurance companies also fall under the agency’s purview. MetLife, in its court filing, stated “That conclusion was arbitrary and capricious, conflicts with the council’s statutory obligations under the Dodd-Frank Act and the rules and guidance that the council promulgated for designating nonbank financial companies, and was reached through a procedure that denied MetLife its due process rights and violated the constitutional separation of powers.”
This essay was originally published by James D. Best at Constituting America.